India’s two wheeler market is considered one of the biggest in the world and this has kind of doubled in last half a decade due to the new models that have been launched. If facts are to be believed about 40 million new two wheeler vehicles have been sold this year. The used or what we call second hand two wheeler vehicles market is approximately 45% of the new two wheeler market i.e. every 4 out of 10 two wheeler vehicles sold are used (second hand). This second hand market has grown at an average annual rate of 30% in the past five years. According to a research by IFMR Capital, the market for used second hand commercial vehicles is INR 1000 Billion.
The used two wheeler market is completely unorganized but it gives viable option of doing great business in this sector. Also in India more two wheelers are driven in comparison to the four wheelers and this is justified by the fact that the used two wheeler market is twice the four wheeler market. Also this unorganized sector has seen tremendous growth owing to reasons such as increasing household income, emigration of individuals especially youth to metro cities for education and Job purpose and the greater availability of used two wheelers. In India where traffic is a big concern for everybody a two- wheeler helps weaving through the traffic and cover short distances without spending too much money.
Due to the migration of majority of the people to metros for jobs and education there has been a steep demand for two wheeler vehicles. Majority of the relocation though has been because the people have moved towards working for IT industry. If you are staying in a new city, you need a home to stay and a vehicle to commute. As we spoke to a lot of customers we realized that one option is to get your vehicle also relocated from your native place i.e. if I am relocating to work as a software executive in TCS from Bhopal to Pune I can get my vehicle also through companies such as GATI. But that is not a feasible option. Getting all the documentation done such as getting NOC (No objection Certificate) is a big pain and is quite costly. Shelling out Rs 25,000-30,000 on NOC approval does not make sense. Rather it would be best to buy a second hand vehicle and use it till the time one is there in the city. This is what Aditya had to say, who is working with WIPRO. I, getting my Pulsar from Patiala to Pune isn’t a great option. What best I thought would work for me is to buy a second hand two wheeler here in Pune and use it till the time I do not switch to a new company (assuming that there could be relocation) or change my city for some or the other reason. I would not be here in Pune forever so why purchase a new bike again rather the best is to contact a dealer and get good deals for second hand bikes. It’s like we do not purchase a home just because I am going to work in a new city for the next two years.
This is from the buyer’s perspective. When we spoke to more of our customers we realized that people who had just joined their job, maybe, a year back, were more comfortable getting a second hand two-wheeler financed rather than the complete down payment in one go. So we thought about bringing this initiative to our table and give two wheeler loans to our customers who were looking for second hand vehicles. The customers would be making the repayment to us by posting their deposits which would generally be monthly EMIs and we would be giving it back to the lender on monthly to monthly basis. We here at LOANMEET would determine the borrower’s savings, post tax monthly income and expenses and then decide how much you can afford every month to pay. Also if one is a new rider i.e. a first time rider it is always advisable to first buy a second hand bike.
Thus two wheelers cater to the needs of low and middle income users in rural and urban India and help in filling up the gaps that are there due to poor public transport systems, which are inefficient, non-integrated and non-existent. Out of the INR 1000 Billion market of second hand used two wheelers, about 55% of it is governed by the Private lenders, Money lenders.
While talking to a lot of dealers who offer second hand two wheelers. This is in crux what we could make out from the various interviews and meetings:-
While most of the sector was unorganized with 3/5 local dealers dealing only in cash but willing to take up the option of collaborating with LOANMEET so that they could help customers who were willing to purchase a two wheeler through loans. An Activa of model 2014 would generally range from Rs 40,000 to Rs 45000 depending on the condition and usage per se. Similarly a motorbike of the similar model would cost anywhere in the range of Rs 45,000 to 50,000. Dealers who had the option of financing said the rate of interest would be charged anywhere between 22-28% with the whole documentation taking place in 7-10 working days. The documentation generally asked during the availment of loan is the salary slip (for working professionals), permanent house address if this is was the borrower’s native place or rent agreement if it is a rented apartment, ADHAAR ID/ Driving license and a bill.
Thus we at LOANMEET eye the window of opportunity here and we hope to beef up our operations towards the second hand two wheeler vehicle loans which have majorly been ignored by the banks till date and the existing players had exit the market in the past. With our operations as fast as borrower getting a loan within 24 hours, with minimum hassle and documentation and lower interest rates. We here at LOANMEET today are trying to fill the vacuum that has been created in the market and help thousands of people like Aditya who are looking for a short term funding or financing. If you are salaried and are well off or are a good self-employed professional, lets help you save some money and offer you loans of value as much as 90% LTV i.e. loan to value. So in case of 90% LTV, your 90% of the amount of the total would be financed and by paying 10% we assure you that the vehicle would be yours.